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Focus on What Matters.

July 13, 2017

For Partners

by Sara McFarland

Why Don’t Patients Pay Off Medical Bill Debt?

As a healthcare provider, it can be very frustrating when patients do not pay their medical bills, especially when a large portion of your practice’s revenue goes unpaid. But, it can be helpful to take the patient’s perspective and realize how/why they may be unable to pay. This insight can help you and your practice avoid bad debt and keep your patients happy.

According to a recent Harvard study, medical debt is the number one cause of bankruptcy in the U.S. The report cites that medical expenses account for approximately 62% of personal bankruptcies. Overall, 26% of American adults ages 18-64 had problems paying or an inability to pay medical bills in the past 12 months. This number is 53% among the uninsured, and even 19% among the insured.

Expected Patient Payments for Medical Procedures

On a more personal level, why do patients have trouble paying medical bills?

Timing: If you want to buy a new car, then you can save up and plan. You have plenty of time to research car prices and specifications. If you are planning on going on vacation you can find the best time and the best deals. You find a time when you will be able to afford it before you go. But, medical expenses often come out of the blue. They can be spontaneous and overwhelming, and they have a knack for showing up at exactly the wrong time. If a patient was recently laid off or made a big purchase, they would probably have the sense to reduce spending according to their means, but patients cannot choose when to get sick according to their means. That’s why we believe patients shouldn’t be penalized for their inability to pay for scenarios out of their hands. Learn more about ProPatient Payment plans here.

Multiple Bills: If a patient becomes ill or requires a procedure, then the odds are that they did not just see one doctor, and they do not have just one medical bill. Say, a patient is hospitalized after a car accident. They get a bill for the hospital stay, the x-rays, the medication etc. Then they are referred to a specialist or PCP, they get a bill for these visits as well. The doctor may want follow-up x-rays, another bill. Then the patient is recommended to physical therapy, they are billed for each session. As the bills build up, they seem to come from all over, and a patient is likely to be overwhelmed and unable to pay.

The Size of Bills: Medical bills can be staggeringly expensive. In some cases, they well eclipse a patient’s income for a month or even a year. Few people have enough money saved up to afford open-heart surgery out of pocket, and insured patients can be stuck with a massive bill after a serious procedure as well. Even copays for specialty drugs can be expensive for insured patients.

Billing Errors: The Access Project, a non-profit healthcare advocacy group, estimates that almost 80% of all medical bills contain errors. It is possible that your patient does not know how to adequately assess the charges and their legitimacy. If so, they may hesitate to pay the bill as a way of stalling for time.

Other Forms of Debt: If a patient is struggling to pay a medical bill, then maybe there are other bills they cannot pay either, such as car payments, mortgages, student loan debt etc. A recent study has estimated that 44.2 million people in the U.S. carry student loan debt. It is possible that your patient has been trying to pay off student loan debts for some time, and now that the spontaneous medical bills have piled on, the debt is too much to pay off, and they are forced to defer on their payments.

What To Do

If a large portion of your practice’s revenue is going uncollected, then it is probably time to consider offer Parasail patient financing. Parasail payment plans are beneficial for both patients and providers. They allow patients to pay their medical bills over time in simple, monthly installments, so that the patient does not incur debt but the practice gets paid upfront. Parasail will take care of the financial issues, so doctors can quit worrying about money and focus on treating patients. To learn more about how Parasail financing works check out some of our case studies online.

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